NBCU Nears a Deal With Hearst for an Esquire Channel, Replacing G4

Well, that was fast—just as NBCU finished jettisoning G4's most valuable properties (when the company canceled Attack of the Show, you knew something was up), multiple sources said it would be reuniting with Hearst Corp. to create an Esquire channel focusing on "the modern male."

It will probably have to focus on the modern middle-aged male, since young men are a notoriously hard demo to pin down. (Esquire's male readers have a median age of 44.3, per GfK MRI.) And while G4 managed to identify a lot of content that interested 18-34-year-old gents, it still had trouble getting them to turn on the television. NBCU has also been remakingmost of the old Comcast-owned networks in its own image, so it seems logical that G4 would be the next to get a fresh look.

Ironically, G4's central focus, gaming, is a vast industry that has grown by leaps and bounds in recent years—just not on TV. The games industry topped $10.5 billion in 2006 according to the IAB, and the same report suggested that in-game advertising could top $1 billion as early as 2014.

But don't tell that to X-Play. It's been notoriously difficult for networks to carve out a chunk of that revenue for themselves, largely because watching people play video games with no interactivity just makes you want to play video games. Interestingly, with an overlay of interactivity in the online space, the same programming is wildly popular.

So NBCU is getting back together with Hearst, until recently its partner on A+E Networks (NBCU sold off its stake in the privately run cable network conglomerate, reportedly with an eye to paying off some of the debts incurred during the merger with Comcast). In doing so, it takes aim at a sector of the market attracting increasing attention: affluent men. If Esquire's male readers aren't as young as NBCU might like, they at least have money to spend, with a median HHI of $83,880.

The demographic seems like a logical progression from the Bravos and IDs of the world, but Esquire will have some catching up to do. Discovery relaunched HD Theater as Velocity earlier this year, with an eye on the exact same demo. Gaming will apparently still be a focus, and the new network will have at least one advantage: a distribution of 71 million households (Velocity is currently in 42 million homes).

As for Esquire, it's unclear what the magazine gets out of this other than exposure for its brand. Neither party has shared details of the arrangement, but a source with knowledge of what NBCU wanted suspected that while the magazine would bolster its video assets, it would doubtfully be included in the integrated deals where the big advertising money lies.

But there is money coming in. With its 71 million homes and a sub fee of 9 cents per head per month, the network generated $76.7 million in affiliate fees last year.

Per SNL Kagan data, G4 is on pace to take in $75.4 million in net ad sales revenue, up 10 percent from $68.8 million a year ago, but down 9 percent from the record $82.4 million sold the year before.

Well, that was fast—just as NBCU finished jettisoning G4's most valuable properties (when the company canceled Attack of the Show, you knew something was up), multiple sources said it would be reuniting with Hearst Corp. to create an Esquire channel focusing on "the modern male."

It will probably have to focus on the modern middle-aged male, since young men are a notoriously hard demo to pin down. (Esquire's male readers have a median age of 44.3, per GfK MRI.) And while G4 managed to identify a lot of content that interested 18-34-year-old gents, it still had trouble getting them to turn on the television. NBCU has also been remakingmost of the old Comcast-owned networks in its own image, so it seems logical that G4 would be the next to get a fresh look.

Ironically, G4's central focus, gaming, is a vast industry that has grown by leaps and bounds in recent years—just not on TV. The games industry topped $10.5 billion in 2006 according to the IAB, and the same report suggested that in-game advertising could top $1 billion as early as 2014.

But don't tell that to X-Play. It's been notoriously difficult for networks to carve out a chunk of that revenue for themselves, largely because watching people play video games with no interactivity just makes you want to play video games. Interestingly, with an overlay of interactivity in the online space, the same programming is wildly popular.

So NBCU is getting back together with Hearst, until recently its partner on A+E Networks (NBCU sold off its stake in the privately run cable network conglomerate, reportedly with an eye to paying off some of the debts incurred during the merger with Comcast). In doing so, it takes aim at a sector of the market attracting increasing attention: affluent men. If Esquire's male readers aren't as young as NBCU might like, they at least have money to spend, with a median HHI of $83,880.

The demographic seems like a logical progression from the Bravos and IDs of the world, but Esquire will have some catching up to do. Discovery relaunched HD Theater as Velocity earlier this year, with an eye on the exact same demo. Gaming will apparently still be a focus, and the new network will have at least one advantage: a distribution of 71 million households (Velocity is currently in 42 million homes).

As for Esquire, it's unclear what the magazine gets out of this other than exposure for its brand. Neither party has shared details of the arrangement, but a source with knowledge of what NBCU wanted suspected that while the magazine would bolster its video assets, it would doubtfully be included in the integrated deals where the big advertising money lies.

But there is money coming in. With its 71 million homes and a sub fee of 9 cents per head per month, the network generated $76.7 million in affiliate fees last year.

Per SNL Kagan data, G4 is on pace to take in $75.4 million in net ad sales revenue, up 10 percent from $68.8 million a year ago, but down 9 percent from the record $82.4 million sold the year before.